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by Mike Caswell

The Canadian Investment Regulatory Organization has ordered Hampton Securities Ltd.'s chief executive officer, Peter Deeb, to pay $1.95-million for high-risk trades that resulted in his firm improperly obtaining access to credit. Among other things, Mr. Deeb entered short sales to obtain money to participate in new issues, according to CIRO. In doing so, he caused Hampton's carrying broker to assume the risks associated with the trading, CIRO said.

The penalties for Mr. Deeb are contained in a decision that CIRO released on Wednesday, Feb. 18. The $1.95-million includes disgorgement of $1.22-million in gains, a $500,000 fine and $230,000 in CIRO's costs. CIRO has also permanently barred Mr. Deeb from serving as a UDP (or ultimate designated person, an executive responsible for a firm's compliance). On top of that, Mr. Deeb is barred from working in a registered capacity for one year and from being an executive or supervisor for three years.

In handing down the penalties, CIRO described Mr. Deeb's violations as significant. "The trading here involved UPRO, a high-risk security, and the transactions were large, both in terms of the volume of trading and the monetary value of the transactions," the decision states. Moreover, Mr. Deeb "frequently obtained improper access to credit and concealed his misconduct by allocating trades at a low value to avoid supervisory review."

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